Budget Process for the Personnel Committee
at First Baptist Church, Tallassee



The Personnel Committee and the Annual Budget Process
Process for Making Recommendations Regarding Personnel Salary, Benefits, and Reimbursements as a part of the Annual Budget Process

Purpose:
The New Testament provides direct, clear instruction to the church concerning financial support of those who minister to us.

The Lord commands that those who preach the gospel should be supported by those who receive the gospel. -- I Corinthians 9:14

Those who are taught the Word must share in all good things with their teacher. -- Galatians 6:6

The laborer of Christ deserves to be paid. -- Luke 10:7

We are a church, but our congregation is also an "employer." In this role we have the responsibility to make sure we do all we can to take care of the needs of those who serve us, as good stewards of the church's financial resources.

1. The personnel committee prepares recommendations to go to the deacons, who in turn recommend personnel adjustments to the church for approval. The personnel committee is responsible to do the necessary "homework" and make recommendations. This enables the deacons to make final decisions about what will be presented to the church in a fact- based manner and not to have to "make it up off the top of their heads" in deacons meeting.

"The Deacons alone have the authority to recommend any salary changes." -- Page 13, Church By-laws
2. Materials from the Alabama Baptist State Convention and the Annuity Board of the Southern Baptist Convention are available and shall be read and used in the process of formulating recommendations for the deacons. In 1993, the church voted to accept a report from a long range planning committee which recommended, in part, as follows:
D.Salaries and Benefits of Employees It is recommended that church membership and deacons follow the recommendation of the "Report of the Layman's Salary Study Committee For Pastors, Church Staff" of the Alabama Baptist State Convention in fixing the total benefit package of its staff on an annual basis. Page 28

Resources available from denominational entities include information about recommended procedures, legal and tax issues.

The State Convention materials can be obtained from the LeaderCare/Church Administration office of the State Board of Missions in Montgomery:
1-800-264-1225 -or- 288-2460
P.O. Box11870
Montgomery, Alabama 36111-0870
Helpful articles in Reading Room, SBOM Site

The Annuity Board of the Southern Baptist Convention may be contacted at:

Annuity Board, SBC
1-800-262-0511
There are some free resources for this purpose available on their web site: http://www.annuityboard.org/

3. The Personnel Committee shall make use of compensation studies available from the State Convention (showing how ministers and employees in similar sized churches are compensated) and shall consider these comparisons each year as part of the budget process (see 2 above for information on where to obtain this information).

4. The Personnel Committee shall review the personal income of all church employees with consideration of the income of employees with similar education and responsibilities in other businesses and institutions in the Tallassee area.

5. A distinction shall be made between ministry related expenses (eg. Auto), benefits (personal protection such as health insurance and retirement), and personal income. This is recommended as the best practice by the Annuity Board and the State Convention. The IRS has ruled that churches may not reduce a minister's pay to cover church expenses such as auto reimbursement. They may not provide a "lump sum" and allow the minister to break it down as he sees fit. Instead, the Personnel Committee shall specify financial support categories according to the attached worksheet. These items shall be reviewed line item by line item. The term package shall be avoided.

6. The Personnel Committee shall check health insurance rates for the coming year. If they are going up, it is the church's responsibility to cover them it is not part of the minister's or employee's raise.

7. By church policy, each minister on staff has the equivalent of 10% of their taxable income paid into their retirement through the Annuity Board of the Southern Baptist Convention. If an employee wants to pay in an additional amount out of his salary, he may.

8. According to a policy set by the deacons, the automobile allowance for paid employees is set at the maximum amount per business mile as allowed by the IRS. This involves using an accountable reimbursement system and documentation.

9. The Personnel Committee shall ask ministerial staff about business reimbursements and ensure that they have the tools to properly do their jobs. Books, convention expenses, etc. are in this category.

10. The Personnel Committee shall check the Consumer Price Index to account for inflation. This figure shall be used in computing Cost of Living Adjustments. Unless the church is in financial straits or an employee has performed so poorly that admonishment is required, this should be automatic. Cost of living adjustments are to be distinguished from merit raises.

11. The Personnel Committee shall check the budget for the previous five years and list the rates at which each employee has been paid and supplied over that period. They will know the percentage of increase for each year and how it compared to inflation. They will know how long it has been since each employee has received a raise and if each employees's compensation has kept pace with inflation.

12. The Personnel Committee shall consider merit raises on the basis of the performance of each minister and employee. Across the board rates shall not be used.

13. The input of the Pastor shall be sought in regard to the employees and ministerial staff over whom he is given supervision. He is not to be given the responsibility of overseeing staff members and at the same time given no authority or input in regard to their salaries.

14. The purpose of the Personnel Committee is to represent the needs of the church to the staff and the needs of the staff to church. This committee is the only group in the church specifically charged with looking out for the staff. It may be safely assumed that the Deacons and the Stewardship Committee will look after the church's interests in regard to the budget. When this committee fulfills this responsibility the result will be improved morale and productivity among the staff.

Use this worksheet to develop a comprehensive plan of financial support for your new budget year:

A. Ministry related expenses (not compensation)

1. Automobile $ ____________
2. Conventions/Conferences $ ____________
3. Books, Periodicals, Tapes $ ____________
4. Continuing Education $ ____________
5. Hospitality $ ____________

Total Reimbursement Funds $ ____________


B. Employee Benefits (not compensation)

1. Personal Security Program
a. Medical $ ____________
b. Disability $ ____________
c. Term Life $ ____________
d. Personal Accident $ ____________

2. Church Annuity Plan Contribution $ ____________

Total Benefits $ ____________

C. Personal Income

1. Cash Pay $ ____________
2. Housing Allowance $ ____________
3. Social Security Offset $ ____________
Total Personal Income $ ____________



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